The U.K. votes for Brexit: A recap of the EU referendum action, as it happened

June 23, 2016, 4:54 PM ET

An illuminated EU referendum sign in Manchester Town Hall on Thursday.

Reuters

It’s official — the U.K. has voted to leave the European Union. There’s a sense of shock after opinion polls suggested voters would reject a Brexit.

Stock markets in London and Europe sold off sharply as they opened, with British bank shares taking a particular hit. At one point, the pound hit its lowest level since the 1980s.

British Prime Minister David Cameron announced he will step down Friday morning, saying the negotiations for withdrawal from the EU should be carried out by a new leader. His replacement is expected to be selected by October.

“The will of the people to leave the EU must be respected,” British Prime Minister David Cameron said in a statement Friday. “We must now prepare for a negotiation with the European Union.”

The polling stations have just closed in the U.K. and the counting is about to get underway.

Gibraltar – where polling stations have been closed for an hour – reports a turnout of 84%. A high turnout is seen as a boost for the remain campaign, as it indicates more young people turned up to vote. The younger generation is generally seen as more pro-EU.

The local results will trickle out through the night, with the final result expected around breakfast time in the U.K. on Friday.

The first results are expected to come from Newcastle-upon-Tyne and Swindon. Newcastle, which has benefited from EU funding, is likely to go for “remain.” It’s in a race to report with near neighbor Sunderland, a bastion of “leave.”

If you’re curious to see what a live count against time looks like, Newcastle has a Periscope on its Twitter:

The first analysts’ reactions have also started to come in. Chris Gaffney, president at EverBank World Markets, said in a note that the markets have started to believe the Brexit vote will swing in favor of the remain side.

“The constantly changing polls over the past few weeks have sent many investors into more defensive positions but as voters began to cast their votes these defensive positions were reversed. The risk remains that these investors and the ‘professional gamblers’ are proven wrong later tonight, but all indications are that the U.K. will remain part of the European Union,” he said.

Polls have been ultratight over the past few weeks, showing just a few points advantage to either side. However, the polls out on Thursday have mainly pointed to a stay vote.

The referendum campaign has created a rift through Cameron’s Conservative party, with the prime minister pitted against long-time political allies, including vocal Brexit-supporter and former London Mayor Boris Johnson. Cameron has vowed to remain in the prime minister seat regardless of the vote result, even as several eurosceptics have called for his resignation if the U.K. votes to Brexit.

Ipsos Mori’s final poll, carried out Wednesday and Thursday, shows 54% of respondents are in favor of the U.K. staying in the European Union.

That boosts the “remain” camp by two points compared to a survey from the same pollster out earlier on Thursday.

The pound is holding steady around $1.50 and hasn’t moved on the latest Brexit poll. A question traders are asking themselves now is whether a “remain” result has already been priced in the market. This week alone, sterling has rallied 4.3%.

“Sterling has jumped to reach its best level this year but there had already been sizeable gains over the last week as the Remain camp pulled ahead in the polls. The upside may be limited,” said Joe Rundle, head of trading at ETX Capital, in a note.

Pro-Brexit campaigner and UK Independence Party leader Nigel Farage talks to Sky News in what sounds like a defeat speech, even though he insisted he could still win “the war.”

“I have to say that it has been a long campaign. In my case, 25 years. Whatever happens tonight, whoever wins this battle, one thing I completely certain of is that we are winning this war,” Farage told Sky News.

“We will get our country back, our independence back and our borders back,” he concluded the speech.

The pound erased its earlier gain and tumbled to $1.4464 after the latest local results in the U.K. EU referendum overwhelmingly pointed in favor of a Brexit. Sterling traded as high as $1.5022 earlier in the evening after the first results backed a “remain” vote. However, after the results from Sunderland showed a stronger-than-expected lead for the “leave” camp, the U.K. currency went tumbling. According to Sky News’ result tracker, the “in” side is now behind at 49.5% versus 50.5% for the Brexiteers.

The University of East Anglia is also following the results closely and is continuously crunching the numbers through the night.

Based on the first 10 local results, they are forecasting a narrow win for the “remain” side. They say the predicted vote share for the “stay” camp currently stands at 50.2%, but that the final result is still too close to call.

According to Sky News’ results tracker, the “out” camp is ahead with 50.8%, while the “stay” side is lagging behind at 49.2%.

Time to take stock of the results so far. With results announced from 15 out of 382 counting areas, the “leave” side is narrowly ahead with 50.2% versus 49.8% for the “remain” side.

The first results to be declared came from Gibraltar, which showed a staggering 96% of voters backing a U.K. in the European Union. Strong support to stay an EU member was widely expected in the U.K. territory

One of the first surprises came from Newscastle, which was expected to turn out a strong win for the “remain.” However, only 50.7% of voters in the city backed an “in” vote, creating some of the first jitters in financial markets.

The pound really went tumbling after Sunderland’s resounding Brexit victory was announced. The area voted 61.3% in favor of “out”, beating the 60% threshold that was seen as a solid Brexit showing.

From our columnist Brett Arends: Former UK Business Secretary Sir Vince Cable, a Liberal Democrat, is on BBC TV and he is talking on the assumption that Leave could win. The more results come In, the wider the Leave margin gets. Right now it’s about 53-47%.

This is astonishing. I’ve been talking to people here for the past few days and everyone, on all sides of the issue, thought Remain was heading for a win. Just after polls closed at 10pm, Nigel Farage, the leader of the anti-EU UK Independence Party, effectively said he thought Remain had won.

John Curtice, the British election expert I quoted earlier this week, is now saying Leave has the edge.

The one caveat: The big London results aren’t in yet, and they are expected to favor Remain heavily.

“The markets may have overreacted to the early results,” writes our columnist Brett Arends.

“Betting markets are now making Leave the favorite. But the big London results are only starting to come in, and they are heavily pro-Remain. London boroughs of Lambeth and Wandsworth have just reported, and they crushed it for Remain.”

What a rollercoaster this counting session has been. “Remain” is now back in the lead at 51% versus 49% for the Brexitees. But it’s still early in the night – only 64 of the 382 counting areas have declared results.

Just a few moments ago, the Brexit side looked like it would win with 52.1% of the votes versus 47.9% for the “stay” camp. Ladbrokes’s Brexit Barometer swung to a 59% probability of a “leave” vote from an 88% probability of a “remain” outcome earlier in the night.

Swansea was a big blow for the “remain”, voting out with 51.5% of the vote.

“Betting markets are swinging wildly with the results. Half an hour ago, they were among Leave the clear favorite. Now they have gone back the other way. Oddschecker says the bookies offer Remain at 8/11 and Leave at 11/8,” he says.

“The key issue will be London and its suburbs. They contain a huge number of votes, they are strongly pro-Europe, and their results are just starting to come in.”

“We are now seeing why,” he said early Friday morning after the release of the first local Brexit results came out.

“Investors who had bet heavily on Remain ahead of the vote were very foolish: Not because they should have foreseen the results, but because the downside risks of Brexit vastly outweighed the benefits of Remain,” he added. “Blame Groupthink – as usual.”

The pound dropped below $1.35 for the first time since 1985 in early Friday trading hours as early results from the U.K.’s referendum on its European Union membership pointed to a “leave” vote.

Sterling slumped to as low as $1.3463, before rebounding slightly to $1.3607. With 265 of 382 counting areas having declared results, 51.4% of the voters backed a Brexit versus 48.6% that favored to remain part of the union.

The pound had late Thursday jumped to as high as $1.5022 on early indications the U.K. had voted to stay in the bloc. However, as more local results were announced the vote swung in favor of the Brexiteers.

The U.K. is on track to leave the European Union, according to broadcasters BBC and ITV. In the early hours of Friday morning the two news stations forecast that the “leave” campaign has won the Brexit referendum and that the U.K. will sever its ties with the union it’s been a member of since 1973.

The Sky News results tracker also put the exit side ahead with 51.7% versus 48.3% for the “remain” side, with 322 out of 382 counting areas having declared results.

The pound slumped to $1.3329, the lowest it’s been against the dollar since 1985.

The final result — expected around breakfast time in the U.K. — will mark an end to four months of fierce campaigning that has unleashed an emotional public debate about immigration and the future of the U.K. economy.

Brexiteers have argued the U.K. would be better off free from Brussels’s regulatory restraints and that cutting ties with the EU is the only way the country can control immigration. The “remain” camp, on the other hand, has warned that a goodbye to the union would trigger a wave of economic uncertainty, possibly plunging the U.K. and other European economies into recession.

We’re just waiting for the last 13 counting areas to declare referendum results and then it will be official that the U.K. has voted to leave the European Union.

With 369 out of 382 areas done with counting, the “leave” vote is ahead with 51.7% versus 48.3% for the “remain” camp.

The decision to sever ties with the EU has come as a shock to financial markets, with all risk assets selling off heavily. The pound is down 10% against the dollar at $1.3382, the lowest it’s been since 1985.

“U.K. voters have made their voices heard, and now begins the difficult task of designing an exit from the European Union,” said Tim Adams, president of the Institute of International Finance.

“The full extent of the financial market and economic impact from Brexit will not be clear for some time, but it is sure to be very disruptive in the short term and a drag on economic growth and employment in the longer term – especially for the U.K. itself,” he added.

Brussels wakes up to a new reality — it has to unwind a 43-year-old relationship with the U.K. after the “leave” side won in the closely watched Brexit referendum.

Dutch Prime Minister Mark Rutte, whose country holds the rotating presidency for the EU, will meet with European Commission President Jean-Claude Juncker and European Council President Donald Tusk, Friday morning in Brussels, according to The Wall Street Journal.

Later in the day, European and foreign affairs ministers will have Brexit on top of their agenda at a meeting in Luxembourg.

Leading European politicians reacted with shock to the decision in the early hours of Friday morning. Alexander Stubb, former Finnish prime minister, wished it was all a terrible dream.

Please tell me I’m still sleeping and this is all just a bad nightmare! #Brexit

Shortly before 7:30 a.m. London time, or 2:30 a.m. Eastern Time, Jenny Watson, chairperson of the United Kingdom Electoral Commission, made the official declation that the U.K. has voted to leave the union, with 51.9% backing an exit vote.

Stocks are selling off in the U.K. and Europe as the markets open, and it’s carnage out there. British banks are taking a particular hit, as are home builders. Trading was halted in numerous stocks in Europe at the start, though they’re tricking back.

Here’s a rundown, but this is likely to be a snapshot of the situation as volatility hits:

The U.K.’s Prime Minister David Cameron said Friday morning he will resign, after Britain voted to leave the European Union in a hotly fought referendum. Cameron had been campaigning for the “remain” side, arguing the U.K. would be safer, stronger and better off economically inside the union.

During a speech after the Brexit results were announced, the prime minister said the break-up negotiations with Europe need to take place under a new leader. The new prime minister will take over in October, he said.

“Leaving Europe is not the path I recommended,” Cameron said. “I will do everything I can to help the U.K. succeed.”

Analysts have started reacting to the news that U.K. Prime Minister David Cameron has resigned.

“This a complete disaster but this was expected. Now we have political uncertainty, economic uncertainty, consumer confidence may crash even further and the property market may be hit even harder,” said Naeem Aslam, chief market analyst at ThinkForex, in a note.

“We have an environment under which we do not know who is going to lead the country. Bookies will have another thing to play – who will lead the country and names like Boris and Nigel Farage have popped up.”

Bank of England Governor Mark Carney sought to calm financial markets on Friday morning, vowing to take all necessary measures to ensure financial stability after the U.K. voted to leave the European Union.

In a public statement after the historic vote to Brexit, the central bank governor said the BOE is closely monitoring the fallout from the referendum and is working with other central banks to preserve stability.

“We have taken all necessary steps to prepare for this event,” Carney said. “We won’t hesitate to take more measures.”

The BOE governor also said the bank stands ready to provide £250 billion ($344.48 billion) in additional funds to the financial system.

Will former London Mayor Boris Johnson make a bid to take over from David Cameron as prime minister? His decision to back a Brexit is seen as a move to position himself as a leading candidate. He’s expected to give a speech this morning, so we may find out.

But Johnson’s appearance on the streets of London — where “remain” prevailed in the referendum — has not been greeted kindly.

Donald Trump has feet on the ground in the U.K., ready to give his reaction to a historic day for the country. The presumptive Republican presidential candidate has landed in Scotland, where he’ll visit his golf courses on a two-day visit.

“They took back their country, that’s a great thing,” Trump said, according to reports on Twitter.

Financial markets have started to recover from their Brexit-fueled free-fall, as traders digest their new reality in Europe and traders in the U.S. slowly wake up.

“[Brexit] clearly represents a very significant decision for the UK, for the European Union and indeed for the wider global economy. Markets are clearly shocked by the decision but, in our view, it is not as negative a development as the market’s initial reaction appears to imply,” said Neil Woodford, head of investment at Woodford Investment Management, in a note.

However, all risk assets were still covered in a sea of red mid-morning in Europe.

– The FTSE 100 index was off 4.8%, after opening down 7.7%. It was still on track for its biggest one-day percentage loss since 2009– The pound traded around $1.3893, recovering from a more than 30-year low of $1.3230 – U.S. stock futures also came off lows. Futures for the Dow average slumped 450 points, trimming a slide of more than 700 points– Gold rallied 4.2% to $1,316, after trading as high as $1,362.60 early in the morning– Crude oil lost 4.2% to $48.02. It dropped to as low as $46.70 when it became clear the Brexit side had won

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